Home sales in California improved significantly in July 2008, increasing 43.4 percent compared with the same period a year ago. The information recently released by the California Association of REALTORS® attributed much of the gain in sales to deeply discounted sales in many parts of the state.
Sales of existing, single-family detached homes in California totaled 489,080 in July, an increase of 43.4 percent from July 2007 and up 15.3 percent compared from the previous month.
"Deeply-discounted, distressed sales continue to drive volume in many regions of the state," the state Realtor group's president William E. Brown said.
Year-to-year increases in the number of transactions ranged from a 6.7 percent increase in the San Francisco Bay Area to a 176.5 percent increase in the Riverside/San Bernardino region.
"In general, bigger percentage gains occurred in lower priced areas that had been most adversely affected by the market downturn since late 2005 and that are currently experiencing the biggest declines in prices," Brown explained.
DataQuick Information Services also reported foreclosure re-sales have emerged as a significant market factor, accounting for 40 percent of all California re-sale activity last quarter. A year ago it was 5.4 percent. Foreclosure re-sales in the second quarter of 2008 varied significantly by area, ranging from three percent in San Francisco County to 75.1 percent in Merced County.
While foreclosures and short sales are not a major problem in Silicon Valley, they do exist, according to Tim Alston, a Realtor with Keller Williams and chair of the Silicon Valley Association of REALTORS® Los Gatos/Saratoga District. Alston recently received the highest short sale listing in the county, a home in Monte Sereno listed at $5.25 million.
A short sale occurs is when a bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor. The sale typically is executed to prevent a home foreclosure. For the home owner, the advantages include avoidance of having a foreclosure on their credit history and the partial control of the monetary deficiency. Additionally, a short sale is typically faster and less expensive than a foreclosure.
"These unfortunate circumstances happen not just to a select group of people. It has touched all areas across the board, although typically this area is a strong market," said Alston. Alston has short sale listings in San Jose, Richmond, Oakland, Mountain House, Los Baños and other places across the state.
Alston said there are currently eight active and pending short sales in Los Gatos and four active and pending in Saratoga. He disclosed Santa Clara County had 2,329 active and pending short sales as of last week.
While short sales can provide some relief to troubled homeowners, and may seem a bargain for buyers, the drawback is these transactions take more time to close. Within the last 12 months, Alston noted only 905 short sales have closed in the county or only 38 percent.
"It usually takes 60 to 90 days or more before the transaction is completed, and the delay is usually on the bank's end," Alston explained.
The California Association of REALTORS® also disclosed the July median price of an existing single-family detached home slipped to $350,760, a 40.3 percent decrease from the revised $587,560 median for July 2007 and down 4.5 percent compared with June's median price. The report stated large decreases in the median are largely due to the dramatic change in the mix of sales since the onset of the credit/liquidity crunch and the increase in the share of distressed sales.
"Home values in Silicon Valley are holding," according to Alston.
He indicated the California Association of REALTORS® report once again ranked Los Gatos and Cupertino among the top cities with the highest median home prices in the state, and along with Mountain View, these cities were ranked among the top cities with the greatest median home price increases in July.
Statewide, the 10 cities with the highest median home prices in California during July 2008 were: Manhattan Beach, $1,774,727; Los Gatos, $1,425,000; Mill Valley, $1,375,000; Burlingame, $1,294,000; Calabasas,$1,188,000; Newport Beach, $1,145,000; Cupertino, $1,041,250; Rancho Palos Verdes, $1,005,000; San Carlos, $975,000; Danville, $930,000.
Statewide, the cities with the greatest median home price increases in July 2008 compared with the same period a year ago were: Los Gatos, 36.6 percent; Mill Valley, 28.6 percent; Manhattan Beach, 9 percent; Berkeley, 8.2 percent; Mountain View, 6.9 percent; Cupertino, 1.1 percent.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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